Why change the indicators for measuring education and income?
The indicators were changed for several reasons. For example, adult literacy used in the old HDI (which is simply a binary variable – literate or illiterate, with no gradations) is an insufficient measure for getting a complete picture of knowledge achievements. By including average years of schooling and expected years of schooling, one can better capture the level of education and recent changes. Gross Domestic Product (GDP) is the monetary value of goods and services produced in a country irrespective of how much is retained in the country. Gross National Income (GNI) expresses the income accrued to residents of a country, including international flows such as remittances and aid, and excluding income generated in the country but repatriated abroad. Thus, GNI is a more accurate measure of a country’s economic welfare. As shown in the Report, large differences could exist between the income of a country’s residents, measured by GNI or GDP.
